The Supreme Court has granted an estate agent permission to appeal in a case that raises the question of when a contract arises for the provision of agency services.
Lord Wilson, Lord Sumption and Lord Hodge have given the go-ahead for the appeal to be heard next year in the dispute between a developer and an estate agent over commission of £42,000 plus VAT in respect of the sale of a number of properties on a 14-flat development in Hackney.
The developer, Edward Wells, sold six of the properties through a local agency and one was under offer. The remaining flats in the development were not selling. Things changed when another agent, Mehul Devani, introduced to Wells by a mutual acquaintance, contacted a housing association.
The association made an offer for all the flats that remained unsold and, following completion of the transaction, Devani sent the developer an invoice for commission in the sum of £42,000 plus VAT. Devani claimed the sum claimed was in line with what the parties had agreed on the telephone, but the developer refused to pay.
Last year, the Court of Appeal ruled, by a majority, that the developer was not liable for the commission, Lewison LJ holding that agreement on the event that triggers an agent’s entitlement to commission is essential to the formation of a legally binding contract for the provision of estate agency services.
He ruled that, here, the bargain was incomplete because the parties had not agreed the “commission entitling event”.
Now Devani has been granted permission to appeal.
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